University of Florida Levin College of Law
From the SelectedWorks of Ronald L Dearinger
2010
Organizational Behavior Evaluation of Southwest
Airlines
Ronald L Dearinger, University of Florida
Available at: http://works.bepress.com/ronald_dearinger/8/
Running Head: ORGANIZATIONAL BEHAVIOR EVALUATION OF SOUTHWEST
AIRLINES
1
Organizational Behavior Evaluation of Southwest Airlines
Ron Dearinger
University of Phoenix
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Abstract
The airline industry has been in the forefront of the economic and ecologic turmoil in
which the United States and the world have been involved. This paper directs its
concerns to the organizational behavior strategy practices of Southwest Airlines.
Through an assessment of Southwest‟s overall design approach (mission, strategic
overview of the leadership, glance at the organizational structure, corporate culture and
people systems), this paper will provide an evaluation of the short and long-term
effectiveness of the strategy, and the impact on environmental, political, sociological,
psychological and fiscal arenas on behavior. The ways in which Southwest illustrates
theories of organizational design and behavior will be explored. This paper also explores
how behavior will influence Southwest Airlines‟ future.
ORGANIZATIONAL BEHAVIOR EVALUATION OF SOUTHWEST AIRLINES
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Organizational Behavior Evaluation of Southwest Airlines
The ability to fly has been one of man‟s greatest achievements. From Leonardo
De Vinci to the Wright brothers, from Lindbergh to John Glenn‟s orbit around the earth,
flight has fascinated and riddled humans. This paper explores the organizational design
behavior that has allowed for the success of Southwest Airlines. According to Jones
(2007) organizational behavior is a product of organizational design. “Organizational
design is the process by which managers select and manage aspects of structure and
culture so that an organization can control the activities necessary to achieve its goals.
Organizational structure and culture are the means the organization uses to achieve its
goals; organizational design is about how and why various means are chosen.” (Jones, p.
9). How have the design components of mission, leadership, structure, culture and job
design been a driving force in the behavior of Southwest Airlines with respect to external
and internal influences? What does this author think of Southwest‟s ability to stay
competitive and what recommendations can he offer to better the organizational design
that may provide for future success to Southwest Airlines? Through an analysis of design
theories this author will evaluate if Southwest Airlines conducted research to develop its
organizational behavior strategy. These are questions that will be answered in the forthcoming paper.
Design Strategy
“An organization‟s behavior is the result of its design and the principles behind its
operation. It is a task that requires managers to strike a balance between external
pressures from the organization‟s environment and internal pressures from, for example,
its choice of technology. Looking outward, the design can cause organizational members
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to view and respond to the environment in different ways. Looking inward, an
organization‟s design puts pressure on work groups and individuals to behave in certain
ways” (Jones, p. 9). The environmental, political, sociological, psychological and fiscal
elements of behavior are influenced by the success of the organizational design. When
discussing the organizational design of Southwest Airlines, this author has chosen to
focus on mission, leadership, structure, culture and job design as these elements have
direct impact on organizational behavior.
Mission
An organization‟s mission has a direct impact on organizational behavior.
Southwest has divided their mission into two categories; that of what the customer can
expect, and that of what the employee should expect. For the consumer, the mission
statement is short and states “The mission of Southwest Airlines is dedication to the
highest quality of Customer Service delivered with a sense of warmth, friendliness,
individual pride, and Company Spirit” (Southwest Mission, ¶ 1). In addition, the
leadership added a mission statement for employees of the airline that states “We are
committed to provide our Employees a stable work environment with equal opportunity
for learning and personal growth. Creativity and innovation are encouraged for improving
the effectiveness of Southwest Airlines. Above all, Employees will be provided the same
concern, respect, and caring attitude within the organization that they are expected to
share externally with every Southwest Customer” (Southwest mission, ¶ 2). These
statements were written in 1988 and still hold true today.
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Strategic Leadership and Theories
Leadership plays a key role in deciding what behaviors it wants the organization
to reflect. Over the past 3 decades Southwest has been in an expansion mode, growing
from a small business that served only three airports to the fourth largest airline in the
United States serving 64 cities. The current president is Colleen Barrett and the Chairman
of the Board and Chief Executive Officer is Gary Kelly. The decision making leadership
force is the Board of Directors. “The Vice President of the People & Leadership
Development Department is responsible for establishing and monitoring the personnel
procedures to guide our Goals for Success. All Southwest Airlines Officers, Managers,
and Supervisory Personnel shall be responsible for affirmative action implementation
related to their individual departments. Providing Equal Employment Opportunity is an
important part of effectively managing people and successfully fulfilling our Leadership
obligations to our Employees, current and future, and the Company as a whole”
(Southwest Goals, ¶ 1).
The leadership structure is rational. Scott (2003) tells the reader rationality
resides in the structure itself, not in the individual participants—“in rules that assure
participants will behave in ways calculated to achieve desired objectives, in cognitive
decision-premises that guide individual decision making, in control arrangements that
evaluate performance and detect deviance, in reward systems that motivate participants to
carry out prescribed tasks, and in the set of criteria by which participants are selected,
replaced, and promoted” (p. 54).
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The leadership follows the theory of administration by Henri Fayol which he
developed in 1916 from his own experiences working in an industrial setting. The
leadership values its employees as the organization is in a customer service industry as
well as the airline industry and has developed a leadership structure that reflects its ethics
and concerns. When defining Fayol‟s Administrative theory Hahn (2007) said
administrative theory focuses on the total organization and attempts to develop principles
that will direct managers to more efficient activities" (¶ 3). Wren (2002) defined the
attributes of administration by saying that:
[The administration] is specifically responsible for; ensuring that unity of action,
discipline, anticipation, activity, order, etc., exist in all parts of the enterprise;
recruiting, organizing and directing the workforce; ensuring good relations
between the various departments and with the outside world; coordination of all
efforts towards the overall goal; and satisfying shareholders and employees; labor
and management. (p. 911)
Organizational Structure and Theories
The complex organizational structure of Southwest Airlines is a determining
factor in its organizational behavior. Organizational structure is comprised of several
areas. Among the areas of structural concern are issues of authority and control,
communication, product division, team, geographic and market structure. Southwest
Airlines has defined all these areas and shows a strong capability in all issues. Jones
(2007) reminds the reader that all organizations start out as functional structures. (p. 145)
As Southwest Airlines expanded, so did its structure. The organization has a complex,
hybrid, multi-divisional structure that is based on increasing horizontal and vertical
ORGANIZATIONAL BEHAVIOR EVALUATION OF SOUTHWEST AIRLINES
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differentiation, but also concerned with customer relations as a service driven business.
(Jones, 2007) Southwest must contend with a number of factors that influence its design:
different airports, consumer relations, different divisions (such as maintenance of
aircraft). One challenge Southwest faces in its structural design is taking into account
that airlines are a consumer driven industry. As Southwest operates in 64 different
locations, each location operates both as a business and as part of the corporate structure.
Jones (2007) affirms that each division is run separately and may use a product division
structure, while reporting to a corporate headquarters that uses a more diverse,
multidivisional structure. “Each division in a multidivisional structure is essentially a
different business. Moreover, the responsibility of each divisional manager is to design
the divisional structure that best meets the needs of the products and customers of that
division” (Jones, p. 155). The positive aspects of multidivisional structure include
increased organizational effectiveness, increased control, profitable growth and an
internal labor market. In this structural theory, behavior is controlled through internal
upward mobility. This means that divisional managers are often groomed to enter the
Southwest Airlines corporate world. “Divisional managers have an incentive to perform
well because superior performance results in promotion to high office. A large divisional
company possesses an internal labor market, which increases managers‟ motivation to
work to increase organizational effectiveness (Jones, p. 157). An additional challenge that
a business dominated by consumer demands is how to keep the customer‟s happiness at
the forefront so revenue keeps flowing. One way to structure such an organization is to
put customers first and make decisions based on consumer reaction and satisfaction. A
structure that is consumer focused is unique in that the leadership makes many of its
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decisions based on the reactions of the customers. Many airlines use this type of structure
as part of their design. (DDC-1, 2008)
Corporate Culture and Theories
Southwest is proud of the culture it has developed over the last 37 years. Culture
is a reflection of past behavior. It has a history of innovation and growth. In 1987 the
Department of Transportation started a program tracking and rating customer satisfaction
as more people flew the different airlines. Southwest consistently led the industry with
“the lowest ratio of complaints per passengers boarded” (Southwest, History).
Many airlines have tried to copy Southwest‟s business model, and the Culture of
Southwest is admired and emulated by corporations and organizations in all walks
of life. Always the innovator, Southwest pioneered Senior Fares, a same-day air
freight delivery service, and Ticketless Travel. Southwest led the way with the
first airline web page—southwest.com, DING! the first-ever direct link to
Customer‟s computer desktops that delivers live updates on the hottest deals, and
the first airline corporate blog, Nuts About Southwest. Our Share the Spirit
community programs make Southwest the hometown airline of every city we
serve. (Southwest, ¶ 4)
Southwest has succinctly defined their organizational culture. “The Culture of Southwest
Airlines Co. (“Southwest”) is often the yardstick for many American corporations.
Our Culture is unique because of the SOUTHWEST SPIRIT of our Employees.
Defining SOUTHWEST SPIRIT is difficult, but one of the important components
is an altruistic nature that places others before self. Our Employees are famous for
their warm hearts and giving nature, which is what makes Southwest a Company
ORGANIZATIONAL BEHAVIOR EVALUATION OF SOUTHWEST AIRLINES
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with a conscience. The Employees of Southwest are committed to “doing the right
thing,” which is why giving back to the communities we serve and contributing
positively to our environment is simply the way we do business” (Southwest
Cares, ¶ 1).
One could theorize that the culture very strongly linked to the missions that the
leadership has determined. To work for Southwest one must follow a vision that is
customer service oriented and therefore, pleasant in demeanor and family friendly. The
leadership of Southwest has a special loyalty and commitment to its employees
recognizing the importance of a competent staff when in a public service-driven business.
„Since beginning business in 1971, Southwest has thrived on a Culture which encourages
an entrepreneurial SPIRIT in its Employees, and has emphasized personal responsibility,
initiative, and the use of independent, good judgment. The Golden Rule is one of our core
values, and we have had a “top-down” insistence on the highest ethical standards at all
times (Southwest Issues, ¶ 2).
Job Design
How an organization defines job design from the individual employee to a
broader cultural aspect can have a large impact on how the individual divisions relate
with each other and the organization. Southwest has shown an unusual ability to accept
diversity and promote creativity within its job design. “Job design involves envisioning
and defining specification of work system related to a particular job. It addresses issues
like the methodology of doing the job, the person responsible for doing the job, and the
place of accomplishing the job. The activity of job design helps in making the prevailing
jobs and work systems more challenging and exciting for the employees” (U. of
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Wisconsin, 2003). Job design includes many elements. Southwest Airlines is very
involved with employees and sees employees as key to the organization. “We are
committed to provide our Employees a stable work environment with equal opportunity
for learning and personal growth. Creativity and innovation are encouraged for improving
the effectiveness of Southwest Airlines. Above all, Employees will be provided the same
concern, respect, and caring attitude within the organization that they are expected to
share externally with every Southwest Customer (Southwest Cares, ¶ 2). Southwest
describes its programs to enhance employee satisfaction. “At Southwest Airlines, we
have created a Diversity Council whose purpose is to meet bi-monthly and support the
Company‟s efforts to:
Improve the recruitment and advancement of women and minorities
Increase supplier diversity e.g. MWBE (Minority Women owned Business
Enterprises)
Educate/train “Respecting Differences” consistent with meeting our Company‟s
business objectives; i.e. continue a successful Company providing job security
and a Fun-LUVing Culture
Create awareness and show appreciation of cultural, lifestyle differences within
our diverse workforce
Organize and amplify issues that improve inclusiveness and diversity
The council will serve as a conduit and resource, and may direct issues raised to
appropriate Departments for follow-up and or action (Southwest Cares, ¶ 3)
Environmental Factors Affecting Organizational Behavior of Southwest Airlines
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The way in which the airlines has interacted and been influenced by external
environmental factors is very important when studying Southwest‟s behavior. Southwest
Airlines was started in 1971 by Rollin King and Herb Kelleher. (Southwest History, ¶ 1)
The original name was Air Southwest Co., but when the company incorporated in 1971,
it formally changed its name to Southwest Airlines. Southwest began as a small service in
Texas flying between Houston, Dallas and San Antonio. When the airline industry was
deregulated by the FAA in 1978, it allowed Southwest to expand its service to include
California. Southwest kept expanding from there. Now the Airline is the fourth largest
airline in the United States with over 500 aircraft serving 64 airports with over 104
million passengers a year. Southwest Airlines celebrated 37 years of service on June 18,
2008. In 2007 Southwest had a net income of $101.9 million with a total operating
revenue $9.9 billion, so this expansion was not only geographical but financial, too.
“Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue
mark. Southwest is the United States‟ most successful low-fare, high frequency, point-topoint carrier. Southwest operates more than 3,400 flights a day coast to coast, making it
the largest U.S. carrier based on domestic departures” (Southwest Facts, About the
Company). When the stock market closed on June 20th, a share of Southwest Airline
stock (LUV) was selling for $14.11 with over 14 million shares on the market. (NYSE,
LUV).
Southwest must also contend with public opinion and preferences as the company is a
consumer driven business. The events of September, 11, 2001 are still affecting how the
public feels about the safety and security of air travel. The current rise in fuel prices is
having an added negative affect on the airlines industry as a whole. As fuel prices rise the
ORGANIZATIONAL BEHAVIOR EVALUATION OF SOUTHWEST AIRLINES
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consequence is inevitable that customer fare will have to be increased. This puts pressure
to find alternative places where services can be curtailed so as not to lose business.
Evaluation of Effectiveness of Southwest Airlines Design
This author has analyzed the design structure of Southwest Airlines and has
assessed that because of the willingness of the leadership to accept and listen to the
creative solutions and innovation proposed by employees, Southwest has been able to
stay successful and competitive. Leadership performed adequate research in developing
its organizational behavior strategies. Imaginative administration and staff have created
many programs that have given Southwest a pricing edge over its competition and led to
a unique system of organizational behavior. When analyzing environmental impacts,
Southwest Airlines favorably listened to the demands of the FAA and its customers. As
an example of how Southwest incorporated external influences into the design of its
aircraft, Southwest chose the colors of the aircraft (Apache Blue) because the colors are
representative of its western spirit and attract the eye of the consumer. Organizational
theories were properly incorporated and as a result innovative programs were created.
The programs offered included: frequent flyer programs (Rapid Rewards); purchase and
confirm flight online; removing first class seating and giving all flyers an equal chance to
sit in the front of the aircraft; and innovative ways to check baggage all offer the
customer an easier flying experience.
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Summary and Recommendations
Since the first flight of the Wright brothers in 1903 people have pursued and
reached for the skies. Indeed, flying has become so accessible that the public takes it for
granted, that they can fly virtually anywhere at anytime for an economically reasonable
price. Southwest Airlines was started in 1971 and filled a need in the southern plains of
Texas. Because of deregulation by the FAA it was able to expand dramatically its market.
But Southwest retained the ideals of a smaller organization and valued the input of its
employees, never taking for granted that it was a service driven company offering quality
care to the public. These small town ideals kept the organizational behavior one that
stayed in tune with both customers and employees, continuing to innovate and create as it
continued to grow and become financially successful. The leadership of Southwest has
been very successful attending to the environmental, political, sociological, psychological
and fiscal areas of an organization that is heavily influenced by external conditions such
as paradigm shifts, inflation and fuel issues. The organizational design of Southwest has
been able to preserve the company‟s original mission. This author recommends that
Southwest Airlines continue to stay focused on that mission and dedication “to the
highest quality of Customer Service delivered with a sense of warmth, friendliness,
individual pride, and Company Spirit” (Southwest Mission, ¶ 1), as this type of spirit will
persevere in these tumultuous economic times.
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